On the rise: India’s trade surplus with the US, deficit with China
India’s exports to the US in FY25 increased 11.59 per cent to $86.51 billion, according to quick estimates shared by the Commerce Department on Wednesday
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JIRAROJ PRADITCHAROENKUL
US President Donald Trump’s complaints about the country’s high trade deficit notwithstanding, India’s trade surplus with the US increased to $41.18 billion in FY25 from $35.33 billion in the precious fiscal.
On the other hand, India’s trade deficit with China widened to $99.2 billion in FY25 from $85.07 billion the previous fiscal fuelling worries on Beijing’s increased dominance of the country’s supply chains.
Trade surge
India’s exports to the US in FY25 increased 11.59 per cent to $86.51 billion, according to quick estimates shared by the Commerce Department on Wednesday. The increase was led by sectors such as pharmaceuticals, electrical machinery & equipment, chemicals, plastics, apparel & textiles and articles of iron & steel.
Imports of American goods by India also increased in FY25, but at a lower 7.44 per cent to $45.33 billion. Increased imports were largely in sectors including fuels & mineral oils, gems & jewellery (including precious metals), machinery and mechanical appliances and electrical appliances.
“Although Trump has named India several times as a high-tariff-charging nation and has complained about the US’ trade deficit, India’s trade surplus against the US is low compared to countries like China, Mexico and Vietnam. India also ranks below countries such as Germany, Canada and Japan,” an official tracking the matter pointed out.
Despite quality control orders and trade remedial measures, such as anti dumping and subsidy actions, to keep a check on influx of Chinese goods, India’s imports from the country increased 11.52 per cent in FY25 to $113.45 billion.
The rise in imports is driven by increasing demand for electronics, EV batteries, solar cells, and key industrial inputs—sectors where China dominates India’s supply chains, pointed out Ajay Srivastava from Global Trade Research Initiative (GTRI).
China edge
“China is India’s top supplier in all eight major industrial product categories. The PLI schemes are fueling import growth due to their heavy reliance on imported components,” according to a GTRI analysis.
In contrast, India’s exports to China in FY25 fell 14.49 per cent to $14.25 billion. “This signals more than a trade issue; it’s a competitiveness crisis…India needs to fix its internal manufacturing gaps and invest in deep industrial capabilities,” the report noted.
Published on April 16, 2025
